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Circuit Breakers Technical Meaning

In electrical engineering, a circuit breaker is a safety device designed to automatically interrupt the flow of current in a circuit when an overload or short circuit occurs. By opening the circuit, it prevents damage to equipment, reduces the risk of fire and protects users from electric shock. Circuit breakers are rated for specific current thresholds and come in various types, including thermal, magnetic and differential.

In financial markets, the term “circuit breaker” is borrowed to describe mechanisms that temporarily halt trading on an exchange when prices move too quickly or too far. These technical pauses are intended to curb panic selling, allow information dissemination and give traders time to reassess. For example, many stock exchanges implement market‑wide circuit breakers that trigger at predefined percentage declines in benchmark indices.

Both electrical and financial circuit breakers act as safeguards against extreme events, providing a controlled response to prevent further damage. Understanding the technical parameters of a circuit breaker—whether it’s current ratings or market thresholds—is essential for designing systems that balance safety and efficiency.

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Important Disclaimer:

Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

Finery Markets’ software is non-custodial and is provided exclusively to licensed institutional entities that act as independent operators of their own environments. All counterparties are solely responsible for establishing and maintaining their own bilateral trading and settlement relationships. Finery Markets is not a party to any such arrangements and assumes no responsibility for the conduct, verification, or compliance obligations of any users of the software.

Nothing on this website shall be construed as a financial promotion, investment advice, or an offer to engage in regulated activities. Access to and use of the software is strictly limited to clients who have entered into a software licensing agreement with Finery Markets. Persons located in jurisdictions where such access is restricted should not rely on this website or any of its contents.

Additional notice to UK visitors: This website and associated communications are not intended to constitute a financial promotion under The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) and related guidance. Access to services provided by Finery Markets is limited to regulated entities, professional clients and eligible counterparties as set out by the Financial Conduct Authority. UK users are not permitted to use this website for the services of Finery Markets if they don't fall within these categories.